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THE BEST ONE CAN SAY ABOUT 2008 is that it's over. Asia fared very poorly this year -- particularly measured in local currencies. The worst performers (in local currencies) were onetime darling Vietnam, down 67%, followed by China -- the Shanghai Composite was down 64% midway last week. Even the best performers saw a sea of red. The region's top markets were New Zealand, off 34%, and Malaysia, down 39%.

More than a decade after its financial crisis, Asia is again bowed and bloodied, with more pain likely. Estimates for Corporate Asia, both developed and emerging, are still too high, as last week's downward revision by
Toyota Motor
(TM) shows. "We still do not see an earnings bottom" in Tokyo, Goldman Sachs analyst Kota Yuzawa told Dow Jones Newswires last week.

Many hedge-fund managers put up gates this year to avoid withdrawals that would force them to sell at the currently depressed prices. That can't continue indefinitely. The hope is that in '09, selling will be more orderly. "My guess is that the panic is gone, but we still have to get comfortable, get more liquidity, diminish risk aversion," says Rodolfo Amoresano, an emerging-markets specialist and senior managing director at Greylock Capital Management.

Fitting Ending: As they have so many weeks this year, most Asian markets tanked last week.

The biggest myth that exploded this year was that of decoupling. Emerging markets, in better financial shape today than a decade ago and with superior inner resources, so to speak, were supposed to outpace developed markets. The terror attacks in India and the blockade of Bangkok's airports by protestors underscored political risk. (Currencies also have fallen sharply -- in Australia and Korea, for example -- crimping returns to dollar investors.)

Indeed, emerging markets proved "turbo-coupled," quips Ignatius Chithelen, managing partner of Banyan Tree Capital, falling more and faster than their developed brethren. Why? Emerging markets are a barometer of "investor confidence and greed in the developed countries that largely determine their ability to raise capital," says Chithelen.

Some 10 years ago, China's neighbors fretted about its ambitions, as shown by Rene Pastor's Scribblings on the Run, a collection of the Reuters journalist's stories, most with Asian datelines. They're still fretting, while China's rapid slowdown, forecast by its market's steep decline, raises more questions about the sustainability of growth in the region.